Corporate Social Responsibility: Benefits to Businesses and Society

In the business world, corporate social responsibility (CSR) is whereby a business responsibly conducts its operations and sees that it creates positive impacts on society, both environmentally, socially, and economically. The acceptability of businesses in societies largely depends on their engagement in corporate social responsibility, and most of the companies that have the longest lives, largest customer base, and community support are some of the organizations exercising CSR. There are three theories of CSR, and they include the stakeholder theory of CSR, the business ethics theory of CSR, and the shareholder value theory of CSR. The stakeholder theory of CSR argues that since the 1960s', there has been significant growth in the number of stakeholder pressure groups and that their impact on business should not be underestimated.

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The theory puts more emphasis on special social and not any others not related to the corporation. The second theory, which is the business ethics theory of CSR, finds its primary basis on businesses' wider social obligation and their moral duty to the society. The last theory in which the shareholder value theory of CSR argues that businesses have only one social responsibility which is to develop their profits while following the social norms. Neoclassical economists such as Hayek believes that the function of business is to do business that contributes to the economy and society. That business functions should not be confused with those of non-profit organizations.

Examples of Good Practice in the MENA Region

Corporate social responsibility in the Middle East has been framed more as a philanthropic act than a business strategy. However, there are companies in MENA that are yet to view CSR as a core business strategy. The reason why CSR is viewed as philanthropy in the Middle East is due to their religion and culture that we should give to the poor. Middle East nations exhibit significantly different perspectives in their application and practice of CSR. Over the past couple of years, for example, UAE and Oman have different planned and meaningful initiatives. Companies in those countries are taking CSR and sustainability very seriously, and showing an increasing commitment to CSR. On the contrary, countries like Lebanon have put more focus on PR activities while masking them as CSR. Some of the companies that practice CSR in the Middle East include the National Commercial Bank and Jumeirah Group.

The National Commercial Bank

The National Commercial Bank of Saudi was the first company in Saudi to issue a world-class sustainability report. In 2008, the bank won the King Khalid Award for its integration of the CSR concept in the entire company (Maqbool, 2015). The company also has strong supplier and staff development programs educating and affecting other individuals and companies in Saudi Arabia. The company again won the award in 2010 for its responsible competitiveness (Maqbool, 2015). It was majorly selected due to its continued improvement from the previous years, environmental efforts, promotion of corporate sustainability, and a high rate of female employment. Saudi Arabia is known for its stewardship and charity principles, but not much has been done on CSR concepts. The NCB got conferment of the Jeddah Chamber of Commerce and Industry (JCCI) for its category of supporting small enterprises and entrepreneurs, and the conferment was to appreciate the efficient contributions by the bank, its programs, and initiatives in this field (Maqbool, 2015).

Jumeirah Group

Jumeirah Group has several key areas of activities, and for the company, CSR means its efforts in ensuring that it pursues sustainable outcomes through good business standards and practices (Noeiaghaei, 2009). Some of the Group's key responsibilities areas include business conduct and ethics, corporate governance, health and safety, suppliers, colleagues, business owners, the environment, and local communities. Jumeirah Group takes a keen look at the welfare of its stakeholders, and that can be provided in a summary as follows. First, the company engages the stakeholders and understand their expectations so that it can exceed them by adding value. Secondly, the company exercises the management of key social, economic, and environmental impacts, opportunities, and risks (Noeiaghaei, 2009). Thirdly, it implements responsible business practices and guidelines in routine and regular activities. Lastly, Jumeirah Group provides stakeholders with comprehensive reports on the progress.

To ensure that the company embeds sustainable business standards and practices, in its daily business activities, the company has integrated into its overall strategic management framework the general guidelines for managing CSR. Such guidelines include the Balanced Scorecard and the Strategic Map. The strategy is further strengthened by the company's business excellence framework, whose basis is on the European Foundation for Quality Management (EFQM) model (Noeiaghaei, 2009).

Examples of Good Practice Internationally

Google

The company has a wide array of products, and this makes it have diverse stakeholders. The company's stakeholders are from different backgrounds and are affected by varied businesses. Google has to address the interests of its stakeholders through suitable CSR if it is to maintain its leadership as an innovative technology firm (Meyer, 2017). Based on the international standards, the current CSR efforts by Google are satisfactory and comprehensive. One of the major stakeholders in Google who benefit from its CSR initiatives are the communities. The communities derive interest both from the indirect and direct benefits they get from the company, and theoretically, communities can benefit from firms through charity programs and philanthropy. Some of the CSR efforts by Google include charity programs it conducts through Google.org that has provided over $100 million towards investments and grants (Meyer, 2017). The company aims to address several issues, such as climate change, global poverty, and global public health. It also includes in its Supplier Code of Conduct international environmental standards and ethics.

Ford Motor Company

According to the company, their customers are also their neighbors in the global community. It has an ongoing commitment both locally and globally for supporting communities it operates in to have a better understanding of environmental issues, and it also invests in its people (Vartiak, 2016). The company believes that CSR is being willing to help others, being socially tolerant, and environmentally conscious. With such principles, Ford Motors Company has designed a special program for promoting tolerant and equal opportunities, and it also actively supports environmental and social protection programs.

Through its Ford Britain Trust, the company grant funds to fund not-for-profit projects and local education through scholarships and construction and equipping of libraries both in schools and public places. It was the first car manufacturing company to obtain the ISO 14040 certification (Vartiak, 2016). That is an international environmental standard, and it achieved this for all of its facilities located all over the world. Due to its ongoing efforts, Ford Motors has been recognized by Ethisphere Institute to be one of the most ethical companies in the world.

References

Maqbool S. (2015). An overview of CSR programs in Saudi Arabia with reference to select organizations: International Journal of Human Resource Studies. Macrothink Institute. http://www.macrothink.org/journal/index.php/ijhrs/article/download/7753/6496

Meyer P. (2017). Google Stakeholders & Corporate Social Responsibility (CSR). Business Management. Panmore Institute. http://panmore.com/google-stakeholders-corporate-social-responsibility-csr-analysis

Noeiaghaei, N. (2009). Corporate Social Responsibility in UAE: A Case Study of Jumeirah Group's CSR Practices (Doctoral dissertation, The British University in Dubai (BUiD_). https://bspace.buid.ac.ae/handle/1234/243

Vartiak, L. (2016). CSR reporting of companies on a global scale. Procedia Economics and Finance, 39, 176-183. https://www.sciencedirect.com/science/article/pii/S2212567116302763